Ngozi Okonjo-Iweala, two-time minister of finance, says the World Bank and the International Monetary Fund are no longer fit for purpose.

Speaking at the World Economic Forum in Davos, on the theme ‘Who can lead a Multipolar world?’, Okonjo-Iweala called on the Bretton Woods institutions to adapt to the world we live in+ and prepare for the realities of the future.

The former vice-president of the World Bank was joined by Kishore Mahbubani, dean of the Lee Kuan Yew School of Public Policy of the National University of Singapore.

Mahbubani, who spoke ahead of Okonjo-Iweala, called on the United Nations to evolve and change its structure, which was largely built for 70 years ago.

“The west believes it can continue to dominate. My favourite example, Ngozi, hope you dont mind me saying this is that the Europeans believe that the head of the IMF must be European, and the head of the World Bank must be American. Excuse me, those rules were made in 1945, in a different world,” he said.

“You still haven’t had a single Asian or African run these places, clearly these rules are out of date…and that is the core of the problem we face.

“The composition of the UN security council: One of the most provocative things I say is that UK and France are only member of the security council only because they won World War II in 1945. Surely it is time for UK and France to make way for India, or Brazil or Nigeria.”

When it was her turn to speak, Okonjo-Iweala said: “Just to follow up on what Kishore just talked about. If you look at the fact, in terms of contribution to economic growth, emerging countries are contributing more than 50 percent to global growth.

“President Xi said it, China alone is contributing 30 percent. The global south is playing a very important role already, the frustration is that these role is not being recognised.

“There has been evolution of systems to move us from a system of the G-7 to G-20, but even the G-20 leaves out significant important countries. We need a global covenant system that recognises the contribution of developing countries in a much more robust way.

“Coming on to the economic institution, I think if we didn’t have them, the global institutions will need to invent them; we still need those institutions, but the problem is that now they are not fit for purpose.

“They are not following the changes that are faster happening. One, on the different economic shares, two, one the fast move of knowledge and technology, the fact that the world and the workplace is changing very fast.

“We need a global covenant system that would help developing countries also adapt faster. So it is anomalous not only in terms of the leadership of the institution, but also in terms of the shares of different countries in these institutions.

“You cannot have a situation where smaller European countries have a greater share in, say, the World Bank or the IMF than China or India.”

She said the systems needed to be adjusted, so that countries could feel an ownership of these institutions. She also said the institutions themselves needed to be adjusted to recognise that knowledge is moving really very fast.